SPEECH/04/290 Peter Balázs Member of the European Commission Cohesion policy: European solidarity in practice Economic and Social Committee Brussels, 8th June 2004
Ladies and Gentlemen, It is a real pleasure to participate in your discussions regarding the future of European cohesion policy and I want to thank you for this invitation which offers me the opportunity to have a personal exchange with economic and social actors. I am fully aware that exchanging with you, who have a direct experience from the field, can only be help us improve our policy making. Introduction Less than a month ago 1.500 regional and national actors coming from 28 countries gathered together in the Third Cohesion Forum which we organized precisely for discussing some of the issues that you will be discussing here today, namely the Commission s proposal regarding the Third Cohesion Report. Today it is my intention to focus on a few critically important issues that Mr Barros Vale raises in his opinion on the Third Cohesion Report regarding future priorities and architecture of cohesion policy, which support some of the conclusions stemming from the III Cohesion Forum. On your opinion regarding financial resources for Cohesion Policy We agree with you on the need for a Cohesion policy which matches the degree of our ambitions for the Union 2007-13. I share the views of Mr Barrot, who stressed this element on the occasion of the conference on the future financial perspectives which you organized on May 25 and 26 th. In the financial perspectives put forward by the Commission last February, we have made a realistic and I believe sensible proposal for our future ambitions, to which cohesion policy is intrinsically linked. We considered the resources theoretically available (1.24 %) and made a credible and feasible proposal of an average expenditure for the period 2007-13 of 1.14 %, with cohesion policy growing on average approximately at the same level as the budget as a whole. Cohesion Policy plays a critically important part in achieving the political project which we have set ourselves for the period 2007-2013. European Solidarity policy should and can contribute to Growth policy efforts in a mutually reinforcing effort. The Commission believes that the resources it proposes for cohesion policy in an enlarged Europe - averaging 48 billion euros per year - constitutes the minimum necessary. Moreover, it is a figure that is financially responsible, because it maintains cohesion policy at 0.41% of EU Gross National Income, the same figure as today after adjusting for the transfer of rural development policy to the CAP. It is important to remember that more than three quarters of this will be earmarked for the Convergence objective which concentrates on the less favoured regions (under 75% of EU GDP) of EU 25. The Commission took the view that a budget equivalent to 1% of GDP, as requested by some Member States is not enough if we are to finance an enlarged Union of 27 Member States. This will be a Union where economic disparities will be double the level they are today. 2
We know it is a modest proposal in view of the huge challenges ahead: Lisbon and Göteborg as well as the integration of the new member states which are in general well below the average EU 15 income levels, but as you know it is still encountering strong resistance from some quarters. I am confident that with your help we will be able to convince the Council that we need this investment in Europe in order to achieve the objectives we all claim we need to meet and I count on your support. On your recommendations regarding policy priorities We, like you, believe that a further effort is required to reach the Lisbon and Göteborg objectives and that the Structural Funds should help and provide an extra leverage to attain these objectives. Although some progress has been made since 2000, the Union faces huge difficulties in delivering on the goals set in Lisbon/Göteborg, especially when public investment is involved. New financial instruments will be necessary since the open method of coordination established in Lisbon is not enough. We believe that a Community method, in which the Commission is actively making proposals and putting forward incentives, can work better than a loose supranational one, as it is the case today with the Lisbon method. The Structural Funds can provide financial incentives for all regions to mobilize public and private funds to target these priorities. These incentives can act as catalysts for national and regional resources which focus on a limited number of strategically important themes inspired by the Lisbon and Göteborg agendas. They can leverage not only funds but political commitment to these agendas from public and private stakeholders. The Structural Funds have demonstrated over the years that they can contribute to improving the quantity and quality of the capital stock of the EU economy and to the provision of economic opportunity. Structural Funds invest in physical and human capital as well as in the promotion of a business-friendly innovative environment, thereby increasing productivity and jobs and creating the conditions for long-term regional growth. Moreover, we are proposing to help build institutional capabilities which can increase the cost-efficiency in the management of this policy in the new member states in particular. Today, nearly two hundred regions in the Union, the less favoured in particular, can testify on the tremendous advances made over the last two decades in providing economic opportunity to its citizens thanks to the support provided by the Structural Funds and the Cohesion Fund. Moreover, as pointed out in your opinion, in countries such as Greece and Portugal, for example, well over a third of structural aid returns to the rest of Europe in the form of increased exports to these cohesion countries, thus contributing to European wide growth. It is important though to mention that the Third Cohesion Report concerns not only economic and social cohesion as well as regional competitiveness, but also territorial cohesion. I know that you have been dealing this same morning with the topic of metropolitan areas in the opinion made by Mr Van Lersel and I want to tell you that we are aware of the territorial and governance challenge that urban issues represent. This is why we are working on a new Structural Funds regulation which opens up the possibility for urban issues to be dealt with directly by the relevant urban authorities and local partnerships. 3
For the future, it remains essential to maintain an effective cohesion policy at European level to promote modernisation and faster growth in the less-developed regions in particular, and to bring more people into productive employment across the Union as a whole. In this sense, the Convergence objective which concentrates the bulk of EU financial aid, tries to create the right conditions in terms of infrastructures (transport, energy, environment, telecommunications) and human capital in particular, which can develop a process of sustained and sustainable economic development conducive to more and better jobs in those regions that need it most: the less favoured regions of the Union, most of which are now to be found in the new Member states. In short, we believe that solidarity and competitiveness are the two sides of the same coin in the process of European integration. No one can seriously question any of the two without endangering the integration process itself. They are an integral part of the European social market model. We need to consistently refocus cohesion policy to foster growth and competitiveness, while preserving cohesion and solidarity, throughout all regions of the enlarged Union. We can do this by placing the Lisbon-Gothenburg objectives as the backbone of the reformed Cohesion Policy that we are proposing. On your recommendations for strengthening partnership and increase controlled decentralisation We firmly believe that further involving regional and local social partners in the sustainable development effort is necessary for improved economic governance in the EU and for accelerating the pace towards the Lisbon and Göteborg targets. The promotion of good regional governance and strengthened public-private partnerships and cooperation networks among regional stakeholders lie at the heart of the reform of Cohesion Policy. Deeper involvement of regional and local actors in the planning and implementation of cohesion policy is not only a matter of good regional governance but also a question of economic efficiency as clearly explained in the third Cohesion report. And let me reassure immediately that public-private partnerships will be encouraged as requested in the recommendations of Mr Barros Vale s opinion. It is through territorial proximity and thanks to a clear understanding of the means and potential of every region that we will be able to promote the business networks, the clusters and the necessary connections to the knowledge-base that would allow us to push forward towards the Lisbon and Göteborg objectives. We must remember that innovation in our small and medium-sized enterprises which provide the principal source of present and future employment in European regions is a critically important objective to achieve the Lisbon and Göteborg agenda, as rightly stated in your opinion. Let me also tell you that we will be developing policies that will provide more focussed support for businesses regarding entrepreneurship, access to venture capital and to advance business services, clusters promotion, university-entreprises relations etc. as requested in the opinion of Mr Vever on European business competitiveness, which you discussed this morning. And this brings me to a very important issue: we have to clearly state that contributing to a harmonious balanced and sustainable development throughout the Union also means allowing for regional diversity. 4
We are convinced that this rich regional diversity of Europe is a source of competitive advantage in the knowledge economy that we are trying to build. Conclusions Cohesion Policy is European solidarity in practice in the interest of us all. That is, shared investments efforts among the Union, the national, regional and local levels, with community value added, to the benefit of the whole of the European economy and society. As demonstrated by past experience, by mobilising Europe s unused potential cohesion policy has pushed European economic performance overall, while at the same time reducing economic and social disparities. The third cohesion report clearly confirms these achievements. The Commission will soon adopt its legal proposals for the future programming period, which will be based on the conclusions of this report. Moreover, Cohesion policy is in fact one of the most tangible and visible instruments in the hands of the Union to show the European citizen the value of closer integration. It is therefore an essential tool for tackling the Lisbon-Gothenburg challenge and for consolidating the European social market model. In this frame, the support of the Economic and Social Committee and of the Committee of the regions to the Commission policy proposals is very important, if we want to get a good result in the coming negotiation at the Council and Parliament level. 5